June home sales ebb; median home price climbs

LOS ANGELES — California home sales pulled back in June as home prices continued to climb, with most regions posting healthy double-digit year-over-year gains and the statewide median price maintaining above the $400,000 mark for the third straight month, the California Association of Realtors reported.

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“Despite a small increase in inventory, the supply of housing remains tight in most parts of the state and continues to fuel home price increases,” said CAR President Don Faught. “The surge in home prices in the past year has given homeowners with previous underwater properties an opportunity to become trade-up buyers. However, many are finding this difficult because they either lack sufficient cash for a down payment or they are concerned that if they sell, they will have no place to go, given limited inventory. Others may be waiting on the sidelines for values to gain even more before selling, which further contributes to tight inventory.”

Closed escrow sales of existing, single-family detached homes in California totaled a seasonally adjusted annualized rate of 414,950 units in June, according to information collected by CAR from more than 90 local Realtor associations and MLSs statewide. Sales in June were down 3.8 percent from a revised 431,490 in May and down 3.7 percent from a revised 430,960 in June 2012. The statewide sales figure represents what would be the total number of homes sold during 2013 if sales maintained the June pace throughout the year. It is adjusted to account for seasonal factors that typically influence home sales.

The statewide median price of an existing, single-family detached home rose 2.7 percent from May’s revised median price of $417,350 to $428,510 in June. June’s price was up 33.5 percent from a revised $320,990 recorded in June 2012, marking 16 straight months of annual price increases and a full year of double-digit annual gains. The median sales price is the point at which half of homes sold for more and half sold for less; it is influenced by the types of homes selling as well as a general change in values.

“The June decline in home sales was attributed partially to the hike in interest rates in recent months. The average 30-year fixed rate had been stabilizing at around 3.5 percent since the beginning of the year, until it jumped more than 50 basis points in June to reach above the 4 percent mark for the first time in more than a year and a half,” said CAR Vice President and Chief Economist Leslie Appleton-Young. “This rate increase portends a somewhat higher rate environment going forward as the Fed mulls over the start of its tapering off program in response to positive signs from the economy.”

Other key facts of CAR’s June 2013 resale housing report include:

• The available supply of homes for sale eased slightly in June, but was still down from a year ago. The June Unsold Inventory Index for existing, single-family detached homes was 2.9 months in June, up from 2.6 months in May, but down from 3.5 months in June 2012. The index indicates the number of months needed to sell the supply of homes on the market at the current sales rate. A six- to seven-month supply is typical in a normal market.

• Increased market competition has significantly driven down the time on market compared with a year ago. Homes sold in a median of 27.7 days in June after listing on the market, up slightly from 27.1 days in May, but down from 43.5 days in June 2012.

• Mortgage rates increased markedly during June, with the 30-year fixed-mortgage interest rate averaging 4.07 percent, up from 3.54 percent in May 2013, according to Freddie Mac. June marked the first time since October 2011 that the fixed-mortgage interest rate averaged above 4 percent. Adjustable-mortgage interest rates also increased but only slightly, averaging 2.60 percent in June, up from 2.55 percent in May, but down from 2.76 percent in June 2012.